Principles of Economics Exam
Questions with Answers
The 2013 Market for apple cider had seen prices rising while quantities traded have fallen in
recent years. This is most likely the result of - a fall in supply
The market for Walt Disney Theme Parks has seen both prices and quantities increase in Asia in
2014. This is most likely the result of - a rise in demand
An improvement in technology reduces the need for car repairs. This will affect the equilibrium
wage and quantity employed of auto mechanics by - shifting the demand curve to the left
An decrease in the supply of skilled labor will - increase wages and decrease the quantity of
labor hired
A price ceiling will usually - shift neither supply nor demand
A price floor will usually be ________ the equilibrium price - above
The supply of paintings by Vincent Van Gogh is highly inelastic. In the case of Van Gogh
paintings, the price will primarily be determined by ______. If the demand for these paintings
shifts outwards, the price will ______. - demand, rise
A tariff helps a government to raise revenue as well as restrict imports. True or False - True
All insulin-dependent diabetics must have insulin or they could die. This means that the _____
curve for insulin will be ____. - demand, Vertical
, When new fashion leads consumers to like blazers more, demand for blazers will _____. And,
price for blazers at the new market equilibrium will _______. - rise, rise
In a competitive market, market price naturally______ where there is market surplus. - falls
For a demand with price elasticity of value that is less than 1, the total revenue _______ when
the price falls. - falls
The pacifier industry has found a money-saving way to produce their product. This
improvement in technology will cause the supply curve to shift _______, resulting in a
________ equilibrium price. - right, lower
many people cannot tell the difference between Coca Cola and Pepsi. As a result, these two soft
drinks are most likely - substitutes
If a price ceiling is imposed below the equilibrium price, then the market price will _____ and
_____ will result - fall, excess demand
If a price ceiling is imposed above the equilibrium price, then the quantity demanded will - fall
Firms are typically on the _____side of the financial capital market, but could be on the ____
side of the financial capital market if they save funds and reinvest them. - demand, supply
Consider the relationship between interest rates and the equilibrium quantity of loaned funds.
If there is a setback to technological progress so that businesses believe there will be fewer
profitable investment opportunities. - interest rates will fall and the quantity of loaned funds
will fall
consider the financial capital market for car loans. If the level of overall savings in the economy
decreases, then - there will be fewer loans at a higher interest rate
Questions with Answers
The 2013 Market for apple cider had seen prices rising while quantities traded have fallen in
recent years. This is most likely the result of - a fall in supply
The market for Walt Disney Theme Parks has seen both prices and quantities increase in Asia in
2014. This is most likely the result of - a rise in demand
An improvement in technology reduces the need for car repairs. This will affect the equilibrium
wage and quantity employed of auto mechanics by - shifting the demand curve to the left
An decrease in the supply of skilled labor will - increase wages and decrease the quantity of
labor hired
A price ceiling will usually - shift neither supply nor demand
A price floor will usually be ________ the equilibrium price - above
The supply of paintings by Vincent Van Gogh is highly inelastic. In the case of Van Gogh
paintings, the price will primarily be determined by ______. If the demand for these paintings
shifts outwards, the price will ______. - demand, rise
A tariff helps a government to raise revenue as well as restrict imports. True or False - True
All insulin-dependent diabetics must have insulin or they could die. This means that the _____
curve for insulin will be ____. - demand, Vertical
, When new fashion leads consumers to like blazers more, demand for blazers will _____. And,
price for blazers at the new market equilibrium will _______. - rise, rise
In a competitive market, market price naturally______ where there is market surplus. - falls
For a demand with price elasticity of value that is less than 1, the total revenue _______ when
the price falls. - falls
The pacifier industry has found a money-saving way to produce their product. This
improvement in technology will cause the supply curve to shift _______, resulting in a
________ equilibrium price. - right, lower
many people cannot tell the difference between Coca Cola and Pepsi. As a result, these two soft
drinks are most likely - substitutes
If a price ceiling is imposed below the equilibrium price, then the market price will _____ and
_____ will result - fall, excess demand
If a price ceiling is imposed above the equilibrium price, then the quantity demanded will - fall
Firms are typically on the _____side of the financial capital market, but could be on the ____
side of the financial capital market if they save funds and reinvest them. - demand, supply
Consider the relationship between interest rates and the equilibrium quantity of loaned funds.
If there is a setback to technological progress so that businesses believe there will be fewer
profitable investment opportunities. - interest rates will fall and the quantity of loaned funds
will fall
consider the financial capital market for car loans. If the level of overall savings in the economy
decreases, then - there will be fewer loans at a higher interest rate
